What Do Lenders Typically Look For In An Application

For most, applying for a home loan and purchasing a property is a significant life milestone. So how to do you ensure you put your best foot forward to obtain approval for the loan amount you need to purchase the property you want?

Lenders will typically require proof of income, employment and a history of savings. If you can’t increase your income (promotions/pay rise) in the three to six months leading up to your loan application there are other things you can do to increase your borrowing power with lenders.

Take a deep dive into your spending habits. Lenders will closely examine your bank statements to gain an understanding of your outgoings. Credit card statements are almost always requested as well as an itemised list of your monthly expenses. Generally speaking, a review of your spending will assist lenders form an opinion of whether you are living within or beyond your financial means. This in turn can affect the amount of the home loan they may be willing to approve your for.

Your assets and liabilities will also need to be provided before a loan is approved. You may be surprised what cleaning up your liabilities in the lead up to applying for a loan (think at least 3-6 months out) can do to your borrowing power. Consider reducing the limit on your credit card, cancelling buy now pay later accounts and paying out your personal loans.

Feeling a little overwhelmed? Reach out and we can discuss a range of mortgage brokers our clients rave about (we don’t receive any kick-backs). Our process removes the stress out of buying a property so once you’re approved let our professionals move the house hunting process forward for you while you get on with your busy life.